The Problems with Manual Timesheets

Stuck in a time warp 

Traditionally, employee attendance tracking has been a liability for businesses. For decades, business owners have paid a high price for lost productivity, human error, broken systems, and time theft. So what is the solution to this shortfall?

 

A broken system

It is first essential to understand where the problem stems from and the issues that need resolving. Manual timesheets have been essentially the only way to account for employee hours for as long as anyone has known. And although paper-based and spreadsheet-based systems can get the job done, they’re far from ideal. Manual time tracking systems create unnecessary work, add cost to your business, and leave you vulnerable to time theft. Staff often need reminding to complete their timesheets on time, and then the numbers have to be punched into payroll, manually. Here, we discuss the key problems with manual timesheets and how they harm your business.

 

Time theft; an awkward conversation

Businesses have long struggled to account for and find ways to reduce the unethical practices of workplace time theft by employees. Unfortunately, ethics researchers have largely unaccounted for time theft, which is surprising, considering its consequences for business owners. A study conducted in 2007 by HR Magazine found that 73% of American employees have witnessed unethical practices in the workplace.[1] Employees’ ethical misconduct includes showing up late to work, leaving work early, buddy punching, and false recordings of hours worked.[2] 

 

According to Forbes, a recent study suggests that the average employee steals anywhere from 4.5 hours per week. In total, this accounts for almost six full weeks or hundreds of billions of dollars worldwide every year.[3] Time theft is particularly a problem in the construction industry, where “53 minutes per employee is lost daily due to time theft”.[4] Further studies indicated that more than 60% of retail employees admitted to the unethical practice of time theft, explaining the 177 Billion dollar hole in the US Commerce Department.[5] 

 

These are just a few examples of the extent to which time theft negatively impacts businesses. However, it is important to remember that time theft is not unilateral because both employees and employers are victims and culprits of these practices. 

 

In the case of time and attendance, failure to pay staff for overtime is a common way an employer will steal wages, so, having a trustworthy, efficient time and attendance solution is useful to both parties.

 

 

Human error; a shared commonality

 

Time theft isn’t the only way businesses lose money on their time and attendance management. The phrase ‘you’re only human’ couldn’t be more relevant here. Humans simply can’t compete with machines when it comes to adding, calculating, and recalling past events. 

 

For professions such as construction, manufacturing, and engineering, it’s required for laborers to track their hours worked for each project and to enter these hours into a timesheet. This is often done manually, and days after they even did the job. This is a problem, especially for job costing. For such a critical part of their jobs, it’s hard to believe most businesses have yet to make the shift to a cloud-based time and attendance solution.

 

To help comprehend the scale of this, AffinityLive conducted a survey, asking professional service employees about their time tracking habits and accurateness. They surveyed 500 workers and calculated that each person lost $50,000 per year in revenue due to inadequate email tracking with clients. They also found that human error typically accounts for at least 2% of total payroll costs. For a company with 8 employees, this constitutes around $1850 per annum.

 

 

Where to Next?

Now that you’ve got a greater understanding of the problems associated with manual paper or spreadsheet-based timesheets, you’re probably wondering what the best solution is. 

 

Timecloud offers the right solution for you and your business through our cloud-based time tracking software and biometric solutions. You can learn more about these solutions and how they compare to your current manual processes here.

 

If you’re after an advanced time and attendance solution that reduces time on admin, human error, and time theft, then BOOK A DEMO WITH ONE OF OUR CONSULTANTS to discuss your needs and find out how much you could be saving.

 

 

References:

[1] Pomeroy A, Corporate Ethics Affect Employee Productivity, (n.p.: HR Magazine, 2007), 16.

[2] Luna-Arocas and Thomas Tang, The Love of Money, Satisfaction, and the Protestant Work Ethic: Money Profiles Among University Professors in the U.S.A and Spain, (n.p., 2004), 329-354.

[3] Ashik Ahmed, “How to Insure Against Time Theft.”, Forbes, Forbes Magazine, 2 July 2018, https://www.forbes.com/sites/ashikahmed/2018/01/19/how-to-insure-against-time-theft/?sh=17397d785ac8

[4] How Much Can You Save with Automated Time and Attendance, (n.p.: Contractor’s Business Management Report, 2006), 11-14.

[5] McGee, M. K. and M. Fillion, Honesty Is Still the Best Policy, (n.p.: Information Week, 1995), 156.